The airline Latam announced on the morning of this Wednesday (12) that it should exit the judicial reorganization process (Chapter 11) in early November.
Heavily hit by the pandemic crisis, the group filed for bankruptcy in the United States in May 2020.
The company’s operation in Brazil followed the same path 45 days later, after financing negotiations with BNDES failed.
To leave the bankruptcy process behind, the group issued US$ 1.15 billion in bonds, part due in five years and part in seven years. It also secured $1.1 billion in financing over five years.
The proceeds will be used to pay other financing that the company had made at the beginning of the recovery process. The company also obtained a revolving line of credit of about $500 million.
But, as anticipated by Broadcast Columnof Grupo Estado’s real-time news system, the result of the bond issue was less favorable to the company than it had expected.
In a note, the group’s president, Roberto Alvo, highlighted Latam’s liquidity conditions after the recovery.
“In a very challenging and dynamic context, we are on track to complete the financing required by the Restructuring Plan. In the coming weeks, we expect to come out of Chapter 11 with $2.2 billion of liquidity and a debt reduction of about 35% from what we had when we started this process.”
Latam was the airline with domestic operations in Brazil that suffered the most during the pandemic, mainly because it also has the largest international operation.
With the entry blocks for travelers adopted by several countries shortly after the emergence of Covid-19, the company had to suspend most of its international flights.
During Latam’s judicial reorganization process, Azul announced several times that it was trying to buy the company and negotiating ways to make the acquisition possible directly with creditors.
Latam, however, ended up managing to close an agreement with the main creditors in a period of negotiation exclusivity that was guaranteed to it by the US justice.
Source: CNN Brasil
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